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Inventory Changes Can Reveal Reasons For Fewer Home Sales |
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 Contract activity is slowing, a bit, and that will likely eventually lead to fewer sales -- that is to say fewer sales in 2020-YTD than in 2019-YTD. So, if we get to that point, perhaps in July 2020, what shall we conclude about the state of our local housing market if we're seeing fewer home sales this year than last? After all, we have been seeing relatively steady increases in the number of homes sales for almost 10 years now! I think inventory trends (at such a future date) will help reveal the reason for fewer home sales. If fewer home sales are accompanied by rising inventory levels... that will indicate that more sellers want to sell their homes than there are buyers who want to buy homes. That will mean that the market is softening and it will become less of a seller's market than in the past. If fewer home sales are accompanied by steady or declining inventory levels... that will indicate that fewer sellers want to sell their homes and the buyers are still there wanting to buy homes. That will mean that the market is staying strong with sustained buyer interest despite an interruption in the flow of sellers willing to sell. So -- fewer home sales could mean two very different things -- and thus far, it's seeming that it's the second scenario -- fewer sellers willing to sell despite a consistent pool of buyers ready to buy. | |
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Home Buying Activity Continues To Slowly Slow, But Low Inventory Likely A Contributing Factor |
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 The pace of buyers signing contracts to purchase homes continues to slowly slow in 2020 -- with year-to-date contract activity in 2020 now 7% lower than during the same timeframe in 2019. A few contextual notes...
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Home Buyer Activity Still Slowing, Slowly, in 2020 |
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 Are home buyers contracting to buy homes as quickly as we would have expected them to be in 2020? No. Has the pace of home buying activity dropped drastically given the current public health situation? No. As shown above, home buyer activity (this year is the red line) continues to trail off a bit as compared to the past two years.
The timing of contracts is different every year, so if we average out the past two years we see a pace of 485 contracts through May 7th. Thus, this year's pace of buying activity is only 4% slower than the average of the past two years. So... Is COVID-19 affecting the pace of home buying (and selling) activity in our local market? Yes. Is it still relatively likely that this year's total number of home sales will be within 5% - 10% of last year? Yes. Stay tuned for further analysis as we progress through this unusual time. | |
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More Home Buyers Purchase In The County Than The City |
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 Each year, right around twice as many home buyers purchase homes in Rockingham County as compared to in the City of Harrisonburg. That said, the home buyers in the City are much more densely situated -- since the City is comprised of only 17.42 square miles -- while the County spans 849.09 square miles! As a random aside, Rockingham County is the third largest county in Virginia! Not necessarily, as there are more than THREE as many homes for sale in the County as compared to the City.  Where will you purchase your next home? In the City or the County? Why? Based on the lot size, privacy, school district, age, property type? | |
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Contract Activity Slows In April 2020 But Perhaps Mostly Because April 2019 Was A Wild Month? |
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 Contract activity declined 27% in April 2020 -- there were 157 contracts signed last April, and only 115 signed this April. Perhaps this is not surprising given the impact of COVID-19 -- or -- perhaps April 2019 was just a crazy month of contract activity and is not a great month to use for a comparison. When comparing April 2020 (115 contracts) to April 2018 (124 contracts) there was only a 7% decline in contract activity last month. Only time will tell whether this (fewer contracts) is a lasting trend -- but below you'll see how the year has shaped up thus far...  As you can see, the 439 contracts thus far in 2020 is 5% lower than in 2019, but 3% higher than in 2018. So, let's keep on moving along and see what May will reveal! | |
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Do Not Obsess Too Much Over The Zestimate For Your Home |
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 Awesome, my Zestimate is X! Oh my, my tax assessment is only Y! Don't worry too much -- neither is necessarily very close to your home's value -- especially if there is a great variance in the values, as shown above. Of the multiple values shown on the graph above, the market value of the imaginary home in question is the GREEN bar -- a home's value is most often determined by how much other buyers have recently paid for similar properties. A would-be buyer might WANT the home's value to be the "tax assessed value" -- but that might be quite a bit lower than the recent sales prices -- so a home's tax assessed value is not necessarily the home's market value. A would-be seller might WANT the home's value to be the "Zestimate" from Zillow -- but that might (often, usually) vary quite a bit from a home's market value -- so a home's Zestimate is not necessarily the home's market value. A would-be seller might REALLY WANT the home's value to be the same as the list price on competing properties currently for sale -- but those listings might sit on the market forever with unreasonably high list prices -- so the list price of competing listings is not necessarily the home's market value. Now, this scenario would be much easier...  As you can see here, there isn't too much of a difference between the different values -- so it matters a bit less which of the value perspectives we use when estimating a likely sales price and planning for a potential list price. But in the case where there is quite a bit of separation in these different value perspectives -- stay focused on what other buyers have recently paid for similar properties -- this alone is your best guide as to what you can/should expect the next buyer to be willing to pay for your house. | |
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Sold Price Per Square Foot On The Rise In 2020 |
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 In addition to watching how the median sales price changes over time, it can be quite insightful to see how the median price per square foot of sold homes changes over time. The graph above tracks the median price per square foot of single family homes (not townhouses, duplexes or condos) in Harrisonburg and Rockingham County over the past 19 years. Price per square foot fell 22% between 2006 and 2011 as the market cooled back off. Since that time, however, we have seen a slow and steady increase in this metric -- from $101/SF in 2011 to $129/SF last year -- which marks a 28% increase over the past eight years. I wouldn't necessarily expect that we would see drastic increases in this metric in the next few years, but an increasing number of buyers (more demand) and significantly fewer sellers (less supply) does make you wonder if we will start to see more rapid increases in sales prices, and thus in price per square foot. Thus far in 2020, we are seeing a 6% increase in the sold price per square foot in Harrisonburg and Rockingham County! ALSO OF NOTE -- this metric is most helpful in understanding value trends over time -- not in calculating the value of one particular property. This median price per square foot is the mid point of many very different homes -- new homes, old homes, homes with garages, homes without garages, homes with basements, homes without basements, homes with acreage, homes on small lots, etc. A median price per square foot can be more helpful in understanding the potential value (or value range) of a single property if we pull that median value based on a smaller data set of more properties more similar to the single property. | |
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YTD Home Buying Activity Slows Slightly in 2020 |
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 This is my first weekly check-in with contract activity where we're seeing a slight decline in contract activity in 2020 as compared to 2019. The data...
So, slightly fewer buyers have contracted on homes this year (to date) as compared to last year (to date). Is it significant? No, at least not at this point. There has been a 2.8% decline in buyer activity in 2020 -- which is a relatively small decline given how much of our daily lives has temporarily changed due to COVID-19. Happy Friday, and I'll check in on this metric again about a week from now. | |
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Despite Everything Going On, We Are Still Seeing Slightly, Barely, More Home Buyers in 2020 |
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 We're now about a month into dealing with the impact of COVID-19 on our lives, society, work, employment, finances, and yes, housing market. As shown above, despite everything that is going on, there have still been more buyers signing contracts thus far in 2020 (379 of them) than we saw either of the past two years (376, 355). That said, the gap is shrinking, and it seems likely that cumulative buyer activity in 2020 might (?) fall behind 2019 at some point in the next few weeks. I'll continue to track this data from week to week to see how COVID-19 is or is not impacting the amount of home buying activity we are seeing in our current market. The same two notes apply from last week...
If you have questions about how all of this relates to your plans for potentially buying or selling a home, feel free to reach out by sending me an email - scott@hhtdy.com. | |
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Harrisonburg Area Housing Market Still Strong Through End Of March 2020 |
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 I'm working from home today, as is the norm for many of us these days. I hope that you and your family are in good health and good spirits as we travel through these unprecedented times. Before we get going, here are two articles I wrote a few weeks ago that are still quite applicable given the current scenario with COVID-19... What follows is an update on our local (Harrisonburg and Rockingham County) real estate market as measured by home sales data through the end of March 2020. Overall, you'll see that almost all indicators are still quite positive in our local market. If we are going to see an impact of COVID-19 on our local housing market, we might first see signs of that another month or two from now. Before we dive in, take a few minutes to learn more about this month's featured home - an upscale home in the Blue Stone Hills area - by visiting 2221PearlLane.com. Also, for those that like to cut to the chase, here's a PDF of my entire market report. Now, onto some data, and what we might conclude that it means...  As shown above...
So, we have been seeing a relatively strong and robust market through the end of March! It gets even more interesting when examined visually...  This year has certainly been quite a yo-yo when it comes to sales per month. We saw a record breaking number of sales in January (higher than the prior three months of January) and then a depressingly low number of sales in February (lower than the prior three months of February) and then things bounced right back up again in March to the highest month of March sales seen in the last few years. I suppose it's not totally unreasonable to think we could see another yo-yo move in April if home sales dip back down somewhat due to COVID-19. Read on a bit more for data on contract activity in March.  Looking at the data visually, again, you'll note that we saw the strongest first quarter of home sales in quite a few years in 2020. If this trend continues we would likely see 1,350+ home sales this year.  Looking now at contract data (above) you'll note that there were only 116 contracts signed in March 2020 - which is a drop off from the 132 contracts signed last March. However, when looking at the entire first quarter (Jan-Mar) this year's buyers have been a group of 320, while only 308 buyers showed up last year during the same timeframe. Last year, April was the strongest month of buyer activity -- as measured by when buyers are signing contracts -- and it will be interesting to see if that proves to be true this year.  Changes in housing inventory (the number of homes on the market for sale) were somewhat predictable over the past month. We usually see inventory levels starting to climb in March (we did this year) but we also saw an overall year-over-year decline in inventory levels, as we have been seeing for the past few years. This will be another good indicator to watch in the coming months to see how the number of homes on the market is affected by COVID-19.  If you're buying a home right now -- or refinancing your mortgage -- you are likely quite pleased with some super-low interest rates. The current average rate for a 30 year fixed rate mortgage (on a purchase, not a re-fi) is 3.5%. This creates an extraordinary opportunity for today's buyers to lock in their housing costs at a low level as it relates to the interest they are paying on their mortgage.  Any changes to this chart above will be telling in the coming months. We only have unemployment data through February right now, and at that point, things were looking great! This could change quite a bit moving forward. That is all of the graphs I'll throw at you today. In conclusion, through the end of March, our local housing market was continuing to move right along at a steady clip. Plenty of sellers are still listing their homes for sale. Plenty of buyers are still contracting to buy homes. Here are a few other articles that I have written over the past few weeks that explore some of the nuances of our market... As we continue through this unprecedented time, I'll continue to monitor where we are and contemplate where we might be headed, and I'll share them with you in my monthly market reports. Until next month, I hope you and your family remain healthy, and if you have questions about how current market dynamics might impact your plans for potentially buying or selling a home this year, feel free to reach out by sending me an email - scott@hhtdy.com. | |
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I Think We Will See Fewer Houses Listed For Sale This Spring |
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 It's spring! Flowers are blooming! The smell of new mulch is in the air! Many of us are battling with the onset of seasonal allergies! And we're seeing new listing after new listing hit the real estate market. Wait, what? Maybe not that last one. You see, it has officially been spring for a few weeks now, but we've also been dealing with the ongoing spread of a pandemic for a few weeks. What does that all mean for how many homes we'll see coming on the market this spring? I think we'll see fewer homes listed for sale given the current circumstances - though it will be hard to really measure that. We'll see fewer homes for sale than we would have if COVID-19 wasn't happening -- but we don't really know how many homes would have been listed for sale that now won't be listed for sale. So, in as much as we do experience a slightly-less-than-normal spring market...
It seems the local housing will make its way through all of this - but the timing of listings and the timing of sales will likely be a bit unusual this year! | |
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2020 Home Buying Activity Might Be Starting To Slow Slightly But Still Ahead of 2018, 2019 |
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 While out for a run earlier this week, listening to a podcast about the news and current events related to COVID-19, one of the people on the podcast made a comment that resonated with me. He said that whenever someone asks him how he thinks COVID-19 is going to affect ____ (fill in the blank with whatever you'd like) he starts by asking them how long they think COVID-19 will still be impacting our daily lives. The same likely holds true as it relates to the local housing market. How will COVID-19 affect home prices (or the pace of home sales) in Harrisonburg and Rockingham County? Well, it likely depends on how long you think COVID-19 will continue to impact our daily lives. Consider these three scenarios from a timeline perspective...
These three different timelines would likely result in very different impacts on our local housing market. But since none of us really know how the future timeline is going to play out, we can't accurately predict if or how the local housing market will be impacted by COVID-19. What we can do, however, is look backwards to see what impact we can observe as time passes. All that to say -- the graph multiple paragraphs above where you're reading now shows the cumulative number of buyers who signed contracts during the first four months of this year as compared to 2018 and 2019. As you'll note, this year started off much stronger than 2018 and 2019 - but over the past few weeks, cumulative buyer activity has been slowing back down slightly, now approaching the 2019 trajectory. Don't read that as all bad news, though, as thus far in 2020 we have still seen more buyers sign contracts than during the same timeframe in 2019, despite COVID-19. And two possibly necessary notes to make sure you understand this data:
As we continue through this unprecedented time, I'll continue to monitor where we are and contemplate where we might be headed, and I'll share it with you here. If you have questions about how all of this relates to your plans for potentially buying or selling a home, feel free to reach out by sending me an email - scott@hhtdy.com. | |
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How Is Coronavirus Affecting How Many Buyers Are Buying Homes In Harrisonburg, Rockingham County? |
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 Is Coronavirus slowing down home buyers in Harrisonburg and Rockingham County? It seems it may be, somewhat, but it's probably too early to make any definitive conclusions. Based on the graph above...
Here's another graph that shows looks at the cumulative number of home buyers who signed contracts through the entire year in 2018 and 2019, and thus far in 2020...  Above, you'll note that 2020 is still ahead of 2018 and 2019 when looking at the sum of January through March -- but that 2020 is drifting back downward towards 2018 and 2019. And, plenty disclaimers...
Anyhoo - lots of data, lots of possible conclusions, lots of caveats, and lots to continue to monitor over time. If you're thinking of buying or selling this Spring, let's chat about what makes sense from a timing perspective given continually changing market dynamics. | |
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Some Segment Of Home Buyers Will Not Be Able To Buy For A Time |
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 Unless you are paying cash for your next home, you'll need to be able to show your mortgage company that you have a steady source of income with which you'll be able to make your mortgage payments. That source of income is usually going to be from your job. Some jobs are more interrupted by COVID-19 than other jobs. Plenty of would-be home buyers are still working, perhaps from home, perhaps online, or perhaps their job is one that requires them to keep reporting to their place of employment. Some would-be buyers are having their hours scaled back, or are seeing their income decline, based on changes in business operations. So, BUYERS should keep in mind that if your income is (or is likely to become) interrupted by COVID-19 developments, then we may want to press the *pause* button on the home search just for a moment. And SELLERS should keep in mind that there may be somewhat fewer buyers in the market to buy your home if their income has been (or might be) interrupted by COVID-19 developments. Thus far, it doesn't seem that we're going to see most buyers not being able to buy homes because their income is being affected -- but we are likely to see at least somewhat of a decline in buyer activity. | |
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Is Social Distancing Keeping Buyers From Buying Houses In Harrisonburg? |
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 I don't think I had ever heard of the concept of social distancing prior to March 2020. Maybe it was a thing, but just not a part of our common vernacular? Anyhow -- it's here now, and real -- but the question that many of you have asked me is whether social distancing is affecting market activity in our area. Above is a first look at that -- and I'm coming to a conclusion of "maybe, maybe not, maybe not yet, who knows" -- so, you're welcome in advance for the great clarity I will be providing here. ;-) The graph above shows the number of contracts that were signed (by buyers and sellers) for houses in Harrisonburg and Rockingham County between January 1 and March 25 of each of the past two years, as well as this year. A few observations...
So, now you see why I concluded what I did...
Anyhoo - we'll just have to continue to monitor the impact of social distancing on our local housing market - but thus far, we have not seen a drastic decline in the amount of buyer activity. | |
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Should I Buy A Home Now? |
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 School is cancelled and/or happening at home for the rest of the year. Businesses are closing. Folks are encouraged to stay at home and certainly not spend time in groups any larger than 10 people What does this mean for someone thinking about buying a home? If you were planning to find a home to buy this Spring, should you keep searching for that home and get ready to move forward with a home purchase, given the current state of affairs? As usual, it depends... Yes, you should buy a home now...
No, you should not buy a home now...
So, plenty of reasons to buy a home right now, and plenty of reasons to wait for a bit. As usual, the right answers for you depends on your specific situation as it pertains to where you are living now, why you want to buy, your plans for the near-term and long-term future, your budget, your overall finances, your current job, your future work prospects, etc. So, if you were planning to buy a home this Spring, let's talk things through and make sure we're thinking about it all from all angles and ensure that you are making the best real estate decision for you given your circumstances and goals. | |
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Should I List My House For Sale Now? |
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 School is cancelled and/or happening at home for the rest of the year. Businesses are closing. Folks are encouraged to stay at home and certainly not spend time in groups any larger than 10 people What does this mean for someone thinking about selling their home? If you were planning to sell your home this Spring, should you list it for sale now, given the current state of affairs? As usual, it depends... Yes, you should list your house for sale now...
No, you should not list your house for sale now...
So, plenty of reasons to list your home for sale, and plenty of reasons to hold off on doing so. All that said, this gets slightly more nuanced once we consider your reasons for selling...
So - yes - it depends. If you were planning to list your house for sale this Spring, the decision to do so is at least a bit more complex than it was previously. Let's talk sooner rather than later (and then on an ongoing basis) to figure out what makes the most sense for you given your circumstances and goals. | |
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Is COVID-19 Impacting Our Local Real Estate Market? |
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 Public Service Announcement: Wash Your Hands! :-) Now, back to COVID-19, several folks have asked me if it is impacting our local real estate market. So far, it seems maybe not, for most folks?
So, amidst some rapidly changing times, with many folks working from home and with schools, movie theaters and many businesses closed, it seems that many sellers are still willing to sell and many buyers still want to buy. A few notes, though...
One last note -- all I'm pointing out above is that so far, things seem to be continuing on at a relatively normal clip in the local real estate market. That said, I do recognize that many folks may be seeing significant changes in their lives, their work, their small businesses, their income, etc. So -- two things I'm not saying...
If you have further questions about all of this -- or thoughts, comments or suggestions -- drop me a line at scott@hhtdy.com. | |
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Harrisonburg Area Home Sales Remain Strong in 2020 Despite Slower February |
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 This month's featured home (shown above) is located in Kentshire Estates and you can find out much more about it out by visiting 3241DanburyCourt.com. OK. Now. Let's set the stage... Home sales slowed and prices fell in February 2020. Ahhh! Is the sky falling? Before you lump this news in with the rise of the coronavirus and the decline of the stock market -- remember two things...
So, there we go. Read on to better understand both short and long term trends in our local housing market -- but don't let a few less-than-exciting short term trends make you think our local housing market is (necessarily) experiencing anything as dramatic as what you're hearing about in the (health and economic) news of the week. Moving out from my drawn out intro -- here's the PDF of the entire report -- and let's dive in...  Lots to see and think about above...
This next graph could - again - scare you, given the sort of crazy news we're hearing about all day long this week...  January 2020 was the strongest January we've ever seen -- and it was followed by one of the slower months of February in recent years. Again, should we panic? That red line is going nearly straight down! Here's my take on it -- any given month can be abnormally strong and any given month can be abnormally weak -- perhaps January was overly strong and February was overly weak. I come to this conclusion by looking at January and February sales combined, and am noting that the 161 sales in these two combined months is much higher than the same two months during the previous three years. So -- this isn't a message of "don't worry about that slow, slow February - everything is going to be just fine - trust me" -- it's more of a message of "the market still seems to be quite strong despite a slightly odd (slow) February." And now, we might be done with the nail biting portions of this monthly update on our local housing market, because most of the remainder of these graphs focus on the big picture and the long term trends...  As shown above, buyers have been steadily buying homes at a slightly (just slightly) faster pace for each of the past few years -- but they have been choosing from a smaller and smaller pool of homes for sale at any given time. This has created a strong "seller's market" where many homes are seeing a flurry of showings when they first come on the market and sometimes are seeing multiple offers.  I don't usually include the graph above in this monthly re-cap, but I thought it was helpful this month. The median sales price has declined slightly between 2019 and 2020 (looking only at January and February 2020, of course) but you will note that the median price per square foot has increased during that same timeframe. This is a good indicator that the downward shift in sales prices is likely a change in what is happening to sell, more so than a change in home values. If more smaller homes are selling thus far in 2020 (as compared to all of 2019) then the median sales price would decline while the median price per square foot increases.  Another important distinction to make when thinking about short term market trends -- changes in the pace of closed sales are not a good measure of current buyer behavior, they just show how many buyers were (or were not) signing contracts 30 to 60 days ago. So, the fact that there have been 204 contracts signed this January and February -- compared to only 176 last January and February -- is likely a good indicator that we will see (closed) home sales bounce back up again in March and April.  One of the main story lines of the past few years has been fewer and fewer choices for buyers in the market -- and this has continued into 2020. The number of homes on the market at any given time continues to fall -- and has now been (slightly) below 200 for three months in a row. This makes it a thrilling time to sell (many showings, sometimes multiple offers) but makes it a nerve-racking, frustrating time to (try to) buy a home.  OK -- if there is one trend in this report that is definitely and 100%, completely, and fully related to the coronavirus, this (above) is the one. The Federal Reserve cut its benchmark interest rate by half a percentage on March 3 to try to combat any adverse economic effects of the coronavirus. That March 3rd rate cut isn't shown above, since my graph only goes through the end of February, but it caused the already low average rate of 3.45% to dip even lower, down to the current level of 3.29%, which is the lowest average mortgage rate that we have ever seen for a 30 year fixed rate mortgage. OK, alright, we made our way through the data for the month. There is much more, of course, in the full PDF of my market report. As we continue to learn more about the coronavirus I hope that you and your family and friends remain well. I don't expect that we'll see drastic ramifications of the coronavirus on our local real estate market because I believe people will still need housing, and people will still have jobs - but we will all have to closely monitor how things develop from here. My advice from last month still applies... If you're planning to sell your home in 2020 -- let's chat SOON about the best timing for doing so, what you should do to prepare your home for the market, and of course, we'll want to start by analyzing your segment of the market. As always -- shoot me an email if you have follow up questions or if you want to chat about your plans to buy or sell. | |
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Highest Pace Of Home Sales In Almost 13 Years |
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 One more bit of context for you to digest as we start off the week -- at the end of January 2020 we hit an annual pace of 1,352 home sales in Harrisonburg and Rockingham County. That is the highest number of sales in a year that we have seen in almost 13 years! We have to go way back to 2007 to find a higher annual pace of home sales. For additional insights into the current (red hot) local housing market, feel free to check out my full market report and commentary here. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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